He has got a garden crop and 2 acres of cotton. He has got a few head of cattle. He may or may not have a woodlot, but he might, during the off season cut a few loads of wood on his neighbor's land, or his own land, if that be the case, and take it to market and sell it, just like you would take hogs that are ready for the market and take them to the market and sell them wherever he might have a market for it. If there is a market for that particular wood in that particular area that is economically feasible for him to take it to the market, he would take it and sell it.

Well, that is one type of producer that we have, and the next type of producer that I discussed was the man who is a borderline case. He can get his hands on an old truck, and maybe have one man to help him, and they will go out and they will cut a load or two or three loads of wood a week and take it to the market and sell it. And the last man is the man such as Mr. Taunton, here, his size and on up to a two-truck, three-truck operation.

Mr. BELL. In other words, in some cases, you might have the mill themselves contracting to do this type of work?

Mr. WILCOX. That is possible.

Mr. MULLINS. That is possible that you would have that situation: yes, sir.

Mr. BELL. It is possible, but not likely?

Mr. MULLINS. It is possible, but not likely. Not likely.

Mr. BELL. Let me ask you this, and this, of course, sounds quite naive: but do you have depletion allowance in the lumber business! Do you get any type of tax benefit from handling of lumber?

Mr. MULLINS. No, sir.

Mr. BELL. I thought, like mining or natural resources.

Mr. MULLINS. No, sir.

Mr. BELL. Now, Mr. Mullins, if this Fair Labor Standards Act were to be extended into your type of operation, would this have an adverse effect on your economy down there?

Mr. MULLINS. Well, sir, if this was extended, why, we would just have to quit. I mean, we couldn't buy any wood. Tomorrow morning, we would be out, because nobody-I as a dealer, these gentleman. or the mill-could have an assurance that this wood was produced in compliance with the law. It would be an impossibility, because it has got to be gathered from such outlying places and scattered places. It would have the effect of forcing us to quit. We would be out of business and there would be no way of operating.

Mr. BELL. In other words, you think that to increase and to place your operation under the Fair Labor Standards Act, that it would have an adverse effect enough to put most of your type of producers that you are describing out of business?

Mr. MULLINS. It would, sir.

Mr. WILCOX. Wouldn't only put them out of business, it would put many of them, actually, on relief. This is a means of a considerable part of their actual cash income that they have to have to live.

Mr. BELL. Has it been true in the past, Mr. Mullins, that the lumber business was at one time quite a flourishing industry down there? In the previous time it was, wasn't it?

Mr. MULLINS. Oh, yes, sir; back in the early days, when the lumber industry moved from the Northeast, moved on down into the South. in the virgin forest. Oh, yes, sir; back in the twenties.

Mr. BELL. And there were many big operators as well as small operators?

Mr. MULLINS. There were in the early days, in virgin timber stands.

Mr. BELL. Now, as I understand it, the large operators have somewhat moved out.

Mr. MULLINS. All of the virgin timber stands are gone. I mean, they just cut the timber and moved on. They are not there.

Mr. BELL. In other words, you have now got kind of like truck lumber, if I may call it that.

Mr. MULLINS. And landownership has been broken up into small tracts, rather than the real large tracts, such as you are thinking about, I am sure.

Mr. BELL. And at one time, your economy was quite dependent, down there, on lumber?

Mr. MULLINS. It is today, and at one time it was wholly dependent on the lumber industry.

Mr. BELL. Now it is today quite dependent upon this smallMr. MULLINS. The pulpwood industry, because it is a big business in our section of the United States.

Mr. BELL. Now may I ask you a question that may be a little bit off? Is your area considered today as somewhat of a depressed area down there?

Mr. MULLINS. Not particularly.

Mr. BELL. There is not large unemployment or anything of this kind?

Mr. MULLINS. No, sir.

Mr. BELL. But I suppose it could be placed into that position if-
Mr. MULLINS. Quickly.

Mr. BELL (continuing). If these businesses went out of business. Mr. MULLINS. If this is extended, we would be in that position overnight.

Mr. BELL. How many people do you think that would affect in the area of employment, and what kind of people? How many people are we talking about?

Mr. MULLINS. Ben, would you like to answer that?

Mr. STEVENS. Well, of course I couldn't give you the number of people involved; but it would be an enormous figure. But the 1958 agricultural statistics showed that in Mississippi, we had, I believe the figure was 100-around 103,000 or 104,000 farmers, and they owned an average of less than 135 acres of land each. And when you go to talking about eliminating buying wood, or purchasing wood from these small farmlots, why you are fooling with the livelihood of an enormous number of people.

Mr. BELL. Well, wouldn't it be possible for these people to survive through their farms, or is the increment of the wood business such that they need it to survive?

Mr. MULLINS. The tree farming has become a vital part of their farm economy. The tree farming.

Mr. BELL. Yes, sir.

Mr. LEWIS. Mr. Bell, hill farming down South is rapidly fading from the picture. Department of Agriculture statistics show that quite clearly, cotton farming, in Union Parish where Mr. Taunton is

from, for example-it is where I was born-used to be it occupied about 30 percent of the total land area. Today, you can hardly find a cotton patch. They have been growing up in trees, or have in some cases been converted to pastureland. But this timber business is becoming, well, timber is providing the source for a real cash crop that is replacing cotton in the hill section, not only of Louisiana, but Mississippi and Arkansas, East Texas, and to a degree in Alabama.

Mr. BELL. Well, now, if this was placed under the Fair Labor Standards Act, if your operations were, there would be no other part or other type of economy that you could move to that would-that could bring this back. Is that right?

Mr. LEWIS. At the present time, Mr. Bell, that is true; and the practical effects of this measure in Louisiana-we can speak, I think, with authority in that State in particular, Mr. Burns and I can-that there are some 300 or 400 producers who would be out of business; and they employ crews of, say, from 3 to 10 men apiece, so that would be the practical and immediate effects, I would say, within a year after this bill was passed, or maybe even shorter. And where they would find employment

Mr. BELL. You have got about 5,000 people?

Mr. LEWIS. Well, something in that area. And we are not certain where it would be, but this would be the practical consequences of this bill. And we don't know where these people would go to work. If the pattern of what happened in 1960, when we lost 200 sawmills, can be used as a criterion, these people are going on relief, a large portion of them.

Mr. BELL. Then, conceivably, you think the impact of this might be so severe that it could in effect make this area that we are discussing, that area that you gentlemen are involved in, somewhat like a depressed area, and maybe need Federal aid.

Mr. LEWIS. I think that could happen.

Mr. MULLINS. Definitely so. I think one point that we should bring up, Mr. Bell, in your line of questioning, now, as Mr. Lewis stated, the hill farming in this section of the Southeast is fast going out of the picture, because the land is not suited for a real productive farm in order to call it a real profitable farm. So they have diversified, into cattle and to pastures and to tree farming; and in the past 20 years, we in the South are extremely proud of the conservation work that has been done. The Federal Government has spent many millions of dollars in a program to plant trees. They plant as little as 5 acres of trees. Farmers have gone, and they have thinned timber stands and improved timber stands. Not in big tracts, where you could send this big operation, but in small tracts, where the operation must remain small.

Now it takes a generation to grow a good stand of timber. So what are we going to do with the fine job, the 20 years that we have put into rebuilding this section of the United States? We throw that program out, if this thing is extended and we are not granted some method by which we could operate these timber tracts, small timber tracts.

Mr. BELL. Mr. Mullins, is it your view that this is kind of the feeling also of the man that uses the ax, aside from the shareholder or owner of the property? That works, say, within the 12-man limit, in one of these operations? Do you think they feel this way, too?

Mr. MULLINS. Yes, sir; absolutely.

Mr. BELL. That you could bring many people here or we could find many people down there that would all support this program, that would feel that it would have adverse effects on their economy and therefore they would lose their jobs?

Mr. MULLINS. Definitely so.

Mr. LEWIS. Mr. Bell, this system of operation suits them. They are satisfied with this system of payment, because it gives them a great deal of flexibility, and they like that. I think you will find that, on examination, an impartial examination that you make, sir.

Mr. BELL. I assume that the reason that the large mills are not, or the large operators are not tree farming, as you put it, or in this business, is because it is just not profitable from a large industry basis. Is that correct?

Mr. BURNS. Not practical; yes, sir.

Mr. LEWIS. This is a practical, and a workable solution to a very difficult problem that has been hammered out over 50 years, and it is working fine.

Mr. BELL. It is a small farm, family farm type of operation

Mr. LEWIS. Yes, sir.

Mr. BELL (continuing). That can only exist under that basis, and essentially does exist that way.

Mr. LEWIS. And this industry is going to have to accommodate itself to taking care of this land pattern that we have.

Mr. BELL. Now is there, as far as you know, any operation like one farmer buying up and operating maybe several tree farms on the basis of getting around the Fair Labor Standards Act by having his sister and his brother and his cousin operate a series of farms in which they each keep under the 12-man position and so that they all operate away from the Fair Labor Standards Act, but that they all separate and really they are one ownership? Is that a practice down there? Mr. MULLINS. No, sirree; no, sir.

Mr. LEWIS. Mr. Bell, this point has been raised many times, and as far as any of us know there is no basis for it at all. It doesn't exist. Just doesn't exist.

Mr. BELL. That is all, Mr. Chairman.

Mr. PUCINSKI (presiding). Mr. Gill?

Mr. GILL. I have had questions already, though I have a couple of extra. Why don't you go ahead, if others are waiting?

Mr. MARTIN. I don't have questions. I just came in.

Mr. GILL. I would just like to clarify one or two things here I forgot to ask about earlier.

When you buy, Mr. Taunton, when you buy your wood from the farmer, how do you arrange the deal? Is there a contract of some sort, or do you just walk in and say "We will cut some of these trees?" What type of arrangement do you have with the farmer for whom you are cutting?

Mr. TAUNTON. Well, I have two ways of purchasing timber. A man may contact me that he has timber to sell and he wants immediate cash for it, and I will go out and cruise this tract and estimate it as best I can and make an offer on the timber. And he may get another producer to come in and make a competitive bid on it, and the man that satisfies him, he sells to this man. And then the other is by the cord;

that is, his timber stumpage as we may pay him is withheld by the dealer and he mails him a check weekly, or, depending on the amount of timber produced, when we agree on a price, as to how he wants it cut and how much he wants for it.

Mr. GILL. The check is mailed by the dealer, you say? You the check is mailed to the farmer by the dealer?

Mr. TAUNTON. Yes, sir; I sell to the dealer, and he of course has the cordage record and the record of how much I pay this individual for his timber; and he withholds this stumpage and mails or delivers this man a separate check from mine. I don't handle his money, and he doesn't handle mine, is the way it works.

Mr. GILL. In other words, the money to the farmer comes from the dealer. Is that it?

Mr. TAUNTON. If it is so arranged; yes, sir. I could pay him myself, but in order to keep any conflict between the two amounts of money, I have it separated for convenience.

Mr. STEVENS. The dealer pays it on instruction from this producer. Mr. GILL. Now you say there are two producers talking to the same farmer. Do both of these producers work with the same dealer? Mr. STEVENS. Not necessarily; no, sir.

Mr. GILL. In your case, in your area, is there more than one dealer? Mr. MULLINS. In my case, or Mr. Taunton's case?

Mr. GILL. I am talking about Mr. Taunton.

Mr. TAUNTON. Well, this is a parish that is of a certain size, and of course there are four or five dealers distributed in different areas. Now, this particular tract of timber may be on a fringe area between two dealers.

Mr. GILL. In other words, the dealers have an area; is that it?
Mr. TAUNTON. Basically: yes, sir.

Mr. GILL. And under them are a series of producers who deal through that dealer?

Mr. TAUNTON. That is right.

Mr. GILL. And that dealer works for a mill. Is that right?

Mr. TAUNTON. Say this tract of timber is on a fringe area between two dealers, and a producer from this dealer may be as close to it as I am, and therefore he would be in a competitive basis on it, too.

Mr. GILL. You are bound to have border problems; but basically it is the mill; the dealer divides, has a certain area, and he has certain producers working for him, who then go to the farmers in that area and get the wood. That is your chain of command, so to speak? Mr. TAUNTON. Yes, sir; it generally works that way.

Mr. BURNS. Mr. Gill, may I comment there? There is, in other words you asked a question if there were more than one dealer-in most cases that I know of, there may be as many as one to four or five dealers covering the same area.

Mr. GILL. For the same company?

Mr. BURNS. Not necessarily. In some cases, the same company; in some cases, different companies.

Mr. TAUNTON. I might add this, Mr. Gill. We are not limited as to where we can purchase wood. We can go into another dealer's area and purchase wood. We can go into another dealer's area and purchase wood; but if we are arranged with the dealer that we are already selling to, well, we still have to deliver through him, see.